Helping businesses secure and maximise R&D tax credits and grants

R&D Tax Credits

R&D Tax Credits enable businesses that incur costs developing products, processes, software or services to receive a corporation tax deduction or cash payment from Revenue. Our R&D tax credit experts ensure your claim is secured and fully maximised

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R&D Tax Credits

Guide Overview


Below we've created 6 simple sections to help you understand how R&D tax credits work and whether your business could make a claim.

What are R&D Tax Credits?


The R&D Tax Relief incentive is designed to encourage innovation and increase spending on R&D activities for companies operating in the Ireland.

It’s one of the Irish government’s top incentives for encouraging investment in research and development. The credit is calculated at 25% of qualifying expenditure and is used to reduce a company's Corporation Tax (CT).

Many businesses don’t realise that they qualify for R&D Tax Credits or that they are not claiming their full entitlement. In 2014, the Irish government allowed €553m in R&D tax credits, which was equivalent to 12% of all CT receipts.

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Who is eligible for R&D Tax Credits?


Any company in any industry may be eligible for R&D Tax Credits.

Any Irish company in any industry may be eligible for R&D Tax Credits. The key is that the company must be undertaking development activities that seek to achieve an advancement in science or technology.

These include:

  • Creating new products, processes or services.
  • Changing or modifying an existing product or service.

What are the key benefits of R&D Tax Credits?

R&D tax credits can be a valuable form of financial support for all businesses. In addition, it is helping businesses across all sectors in Ireland develop some of the world’s leading products, processes and services.

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Cash Injection

R&D Tax Credits provide an essential source of non-repayable funding for many small, medium and large enterprises

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Boost Innovation

R&D Tax Credits help encourage businesses to invest in R&D and innovation.

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Economic Growth

For every €1 spent on R&D tax credits approximately €2.40 in investment is generated for the Irish economy

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Global Leaders

R&D Tax Credits help put Ireland at the forefront of R&D and innovation across the globe.

Myriad is professional, helpful, knowledgeable and friendly. I would definitely recommend Myriad to anyone who thinks they might have an R&D claim. It's great value for money. So it's a no-brainer for me really.

Caroline Reid

Senior Finance Officer, Storage Made Easy (Vehera Ltd)

Is my business eligible for R&D Tax Credits?


If your company is taking a risk by innovating, improving, or developing a process, product, or service, then it will likely qualify for R&D tax credits.

If your company is taking a risk by innovating, improving, or developing a process, product, or service, then it will likely qualify for R&D tax credits. A good test to determine if the work undertaken qualifies as R&D, is whether your project team faced uncertain outcomes at the start of the project.

That means that your team did not know from the outset whether a particular outcome was achievable.

If you can show that your project goes beyond simply applying existing technologies, then you may be eligible to make a claim.

Could you make claim?

Speak to our specialist team today and we can help you to decide whether your business meets the relevant criteria and whether any credits can be applied for the R&D projects you’ve undertaken.

Find out if you’re eligible

SMEs are companies with less than 500 employees with a turnover of below €86 million. Companies above the SME threshold are classed as large companies.

Does your business qualify?

Speak to our experts today to see if your activities qualify.

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R&D Tax Credits Calculator


Our R&D tax credits calculator will provide you with an estimate of the corporation tax savings or cash payment that you may receive from Revenue following a claim for R&D tax relief.

What is your annual R&D costs on staff, software & consumable items?

What is this? Staff costs include gross pay, NI ERS and company pension payments. Agency labour cost is restricted to 65% of the invoice value. Software license costs relate to costs expensed to the P&L account and not treated as a fixed asset. Consumable costs relate to items that are consumed or transformed during the development process such as materials, components and electricity or gas etc.

What is your annual expenditure (before VAT) on R&D activities contracted to a University or Institute of Higher Education (€)

What is this? R&D cost paid to a university or institute of higher education in any relevant EU member state can be claimed.

What is your annual expenditure on agency workers & contractors

What is this? Enter the annual expenditure on sub-contractors who are involved with R&D activities.

Enter the annual expenditure (before VAT) on buildings, plant and machinery for R&D (€)

What is this? Expenditure on the construction or refurbishment of a building, plant and machinery used for R&D activities may qualify where such expenditure qualifies for capital allowances.

We estimate you can save:

€510,625Reset


Contact our R&D tax specialists to make sure your R&D tax relief
claim is fully maximised.

Get in touch to make your claim

What’s the process to claim R&D tax credits?


R&D tax relief claims are monitored and processed by Revenue and you can make a R&D tax relief claim going back 2 accounting periods.

Although it is not a legal obligation, we recommend that an R&D tax claim report is produced that justifies the technical advancement and uncertainties as well as details the eligible expenditure that is being claimed on a project by project basis.

In order to maximise your R&D claim, we recommend speaking with an R&D tax specialist to ensure you're not leaving money on the table.

In the past, Myriad Associates have tripled the claim value for businesses who’ve previously completed their claims in house.

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How we can help


By profiting from our specialist R&D tax credit knowledge and experience, you can be sure of securing & maximising your R&D tax claim. Typically, Myriad Associates submit R&D tax relief claims that deliver up to 3 x more value than in-house prepared claims or those filed by generalist accountants.

About Myriad Associates

Our Ethos

  • Excellence and an uncompromising commitment to quality.
  • A partnership that strives to add significant added value to our client.
  • Full transparency of our services and costs, from start to finish.

Our approach

  • Confident of delivering value to our clients, we offer our services on a success-fee only basis.
  • We handle your R&D claim from start to finish, taking up just two to three hours of your time.
  • Our expert consultants can identify all of your qualifying projects and all your eligible expenses including costs often missed by accountants and in-house teams.
  • We make sure Revenue handles your claim promptly, due to our close working relationship with all Revenue R&D Units and our right-first-time approach.
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Our results

  • We have a 100% success rate spanning 14 years, which means every claim we’ve sent to Revenue has been approved
  • Trusted and respected advisor to our many delighted clients with an industry high customer retention rate
  • Myriad has achieved exceptional results by resubmitting R&D claims that were originally filed by the client. In some cases, we’ve increased previous claims by 300%
  • 1st class industry reputation delivering maximised R&D tax credit claims to companies in manufacturing & engineering, pharmaceutical, software, supply chain, digital design, immersive technology, food and beverage and many more.

Frequently asked questions


The R&D tax credit is automatically offset against corporation tax liabilities, once the details of the claim have been entered in the CT1 return. Unused credits may be offset against liabilities from previous years, carried forward for subsequent years, or paid as a cash benefit (after the credit has been offset against the corporation tax of the current and preceding accounting periods and an excess amount remains). Payable credits are paid in three instalments:

  • 1st payment: no earlier than 9 months after the end of the relevant period
  • 2nd payment: 12 months after the first payment
  • 3rd payment: 24 months after the first payment

Revenue can audit any R&D tax claim made up to four years from the end of the claim's accounting period. Revenue will often ask claimants to provide information about the basis of the claim and may carry out more formal desk and field audits. A claim that is overstated or does not meet the requirements of the R&D tax credit scheme must either be repaid in part or in full, with interest, and Revenue may also raise a penalty.

Companies making an R&D tax credit claim must maintain contemporaneous and relevant records of the expenditure incurred in carrying out the R&D activities. The quality and quantity of the records kept can affect the outcome of an audit. For this reason, many companies choose to work with an R&D consultant as they are able to handle any enquiries from Revenue on your behalf.

In terms of qualifying tasks, the following activities would be considered eligible for R&D tax credits:

  • defining technical objectives
  • identifying uncertainties
  • feasibility studies
  • reviewing new and competing technologies
  • analysing, designing and developing the technology
  • producing technical specification or other documents to explain and support the R&D project and advancement
  • testing the product, process or software
  • planning and managing projects.

In addition, certain indirect support activities may qualify for R&D tax relief, such as:

  • administration, finance, and personnel services specifically required to support R&D activities
  • training to support R&D.

You can claim relief of 25% on qualifying expenses. The main areas of cost that can be claimed are:

  • staff costs (salaries, company pension contributions, employer's Pay-Related Social Insurance [PSRI], bonus payments, and health insurance)
  • agency workers (externally provided workers)
  • individual consultants
  • materials used in R&D or prototyping

It is not uncommon for an R&D team to consist of many individuals from different parts of the business. Your R&D project team may include the R&D Manager, a Lead Developer, Engineers, Project Co-ordinators, CAD Engineers, Quality Control and Testing specialists, and Cost Accountants, as well as members of the senior management team.

R&D tax credits for profit-making SMEs

The R&D tax relief would enable a profitable SME to reduce the amount of corporation tax they pay on profits for the period, by the amount of the enhanced deduction. The current R&D tax relief rate is 25% of qualifying R&D expenditure. If the deduction is greater than the SME’s profit for the period, then this will create a loss for corporation tax purposes.

R&D tax credits for loss-making SMEs

Where the additional enhanced R&D deduction is greater than the SME’s taxable profit for the relevant accounting period then this creates a loss for corporation tax purposes. The SME can then:

  • carry back the loss to the previous accounting period (if there was a taxable profit)
  • carry the loss forward and offset against future profits
  • surrender the loss to Revenue in return for a payable R&D tax credit (after the credit has been offset against the corporation tax of the current and preceding accounting periods and an excess amount remains).

A tax credit payable is paid to the company by Revenue in three instalments over a period of 33 months. The first instalment (33% of the excess amount) is payable no earlier than the 21st day of the ninth month following the end of the company's accounting period in which the R&D expenditure was incurred. The remaining balance is then used to reduce the company's corporation tax liability for the next accounting period. If any excess amount remains, a second instalment of 50% of the amount remaining is payable no earlier than 12 months after the payment of the first instalment. The last instalment is paid, if any balance remains after reducing the company's corporation tax liability for the following accounting period, no earlier than 24 months after payment of the first instalment.

A business must submit its R&D tax relief claim within 12 months of the end of the accounting period during which the R&D activities took place. To make a claim, the business will need to complete the CT1 form through the Revenue Online System.

Revenue will not allow a late claim based on not having sufficient time or not being aware of the R&D tax relief scheme.

When Revenue receives a claim, it follows one of two processes:

  • If the R&D credit is to be used only to offset corporation tax liabilities, it is processed without any manual checks.
  • If the claim is for a payable credit, Revenue will carry out certain verification checks, such as ensuring that all returns are up to date, reviewing the computation and checking the previous claim. Where no issue arises, normal processing continues. If an issue is found, Revenue performs an intervention (an audit).

We strongly advise that a claim for R&D tax relief is supported by a detailed report which outlines the technical advancement and uncertainties as well as providing a detailed breakdown of the eligible R&D costs.

In 2014, Revenue made 162 interventions (from 1,570 claims); there were 178 interventions in 2015 from 1,535 claims (11.5%).

A Revenue intervention of an R&D claim consists of two tests:

  • The "science" test, to ensure that the activities included in the claim meet the statutory definition of R&D activity.
  • The "accounting" test, to ensure that the costs incurred in carrying out the qualifying activity have been properly tracked and accounted for.

Revenue has a panel of experts which it consults as required when completing the science test.

Section 766 (qualifying activities) of the CT1 return must be completed within 12 months of the end of the accounting period in which the business incurred the R&D expenditure.

One of the conditions for a company to make an R&D tax credit claim is that the qualifying R&D activity must be carried out by the claimant company. There are two situations in which relief is available to a company that has not carried out all the qualifying R&D work:

  • A company which carries out qualifying R&D activities and pays a university or institute of higher education to carry out qualifying R&D activities can claim relief, limited to 5% of the expenditure incurred by the company itself on R&D activities or €100,000, whichever is greater
  • A company which carries out qualifying R&D activities and pays another person who is not a connected party to carry out qualifying R&D activities for the company can claim relief, restricted to 15% of the expenditure incurred by the company itself on R&D activities or €100,000, whichever is greater.

In either case, the company must incur at least the same level of expenditure on qualifying activities which it carried out itself, and the subcontracted activity must qualify as R&D in its own right. The Company must notify the subcontracted party in writing that they may not make an R&D tax credit claim for these activities.

Any expenditure which is met directly or indirectly by any grant aid or assistance from the state, or any public or local authority of any other agency of the state or of another relevant EU or EEA member state will not qualify for R&D tax relief.

This means that if your company has received a relatively small grant, your company could lose money overall, as the grant can significantly reduce what your company can claim in tax relief. This is why you should always seek professional advice when making an R&D tax credit claim.

(See also: R&D Grants)

Many businesses don’t realise that they are undertaking eligible qualifying activities. It is not uncommon for their accountants to forget to tell them about R&D tax credits or even to tell them that they don’t qualify. If your technical lead (the R&D manager, lead engineer, or lead developer) is struggling to overcome the technical challenges of your project – if they are scratching their head wondering how to proceed, or losing sleep worrying about the technical uncertainties they face – your project will almost certainly qualify for R&D tax credits.

Common examples of software development projects that may qualify for R&D tax relief include:

  • state-of-the-art software for new projects, or new functionality for existing R&D projects;
  • tools to extend the functionality of application software programs or of an operating system;
  • extensions to database software, programming languages, or operating systems;
  • software development tools, such as tools to port data across platforms, tools for image processing or character recognition;
  • novel data management techniques, such as new object representations and new data structures;
  • innovative methods of capturing, transmitting, manipulating, and protecting data;
  • software to run new computer hardware;
  • software to run on devices with pre-installed operating systems, such as handheld GPS, mobile phones, and tablets; or,
  • means of integrating hardware and software platforms.

Common examples of product and process development projects that may qualify for R&D tax relief include:

  • innovative product development using computer aided design tools;
  • development of second generation or improved products;
  • tooling and equipment fixture design and development;
  • developing unique computer numerical control programs;
  • designing innovative programmable logic controllers;
  • designing innovative manufacturing equipment;
  • prototyping and three-dimensional solid modelling;
  • designing and developing cost-effective and innovative operational processes;
  • integrating new materials to improve product performance and manufacturing processes;
  • evaluating and determining the most efficient flow of material;
  • designing and evaluating process alternatives;
  • designing, constructing, and testing product prototypes;
  • developing processes that would meet increasing regulatory requirements; or,
  • streamlining manufacturing processes through automation.

Your next steps

To find out how we can maximise your R&D tax credits, email or call us now on +353 1 566 2001 - in under 15 minutes we’ll advise you if your development activities will qualify for R&D tax credits.

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